My Experience in Technical Entrepreneurship For Scientists: How It All Began
News Article by Omar Mbowe, PhD, UR Research Assistant Professor and URBEST Trainee
How it all began
It was November 1st 2017 when an email arrived from Tracey Baas, URBEST Executive Director. Not having attended events regularly, because they were either “too scientific” for a biostatistics postdoc or I was caught up in other engagements, I hoped the email would be announcing an event I could attend. It did
The first thing that caught my eye was, “If you are interested in learning more about Technical Entrepreneurship for Scientists, you might consider attending this lunch information session for the spring course TEM411”. The course description indicated that TEM411 was a “multidisciplinary technical and scientific innovation course that offers graduate students in STEM fields the opportunity to meet and network with start-up companies and innovators and professionals in their fields”. The email also introduced one of the course instructors, Dr. Duncan Moore (UR Professor of Optical Engineering and former Clinton White House associate director for technology) as “one of the heroes who rescued the Hubble Space Telescope from ruin”. Dr. Moore “chaired the Hubble Independent Optical Review Panel organized in 1990 to determine the correct prescription of the Hubble Space Telescope”.
Meeting someone who worked that closely with the US president on scientific matters and someone who led a team that corrected the Hubble Telescope’s “nearsightedness” was a big motivation for attending the URBEST event. The free food was an added bonus. Therefore, I promptly RSVPed for the information session.
The Informational Session
During the informational meeting, Dr. Moore and Mike Riedlinger (co-instructor and Simon School of Business professor), gave a history of the course, which was first offered in 1988. Among other things, they talked about how many from the first batch of students went on to start their own businesses. They explained how the course teaches a combination of students from Simon, who are on a quarter system, and the rest of the students, who are on a semester system. They also talked about previous student experiences, including how some students came to the course with little business knowledge but with a lot of excitement about turning an idea into a business, and how the students feel after taking the course. After listening to their presentation, I knew I wanted to take the course. Most of the other trainees were hesitant because they did not know if their classes and/or lab duties would allow them to take an additional class. In fact, I was one of only two trainees who eventually took the course.
The course, whose main objective was to teach students how to write a business plan, met once a week on Tuesdays from 6:10 pm to 9:00 pm. Teams of 3-4 students were formed on the first day of class. Students could join any team they wanted. Final composition of each team, which was subject to the instructors’ approval, had to “be as diverse as possible” and had to “include one or two MBA students and two science/technology students”. After forming the teams, students then went on to discuss different business ideas and eventually settle on one for the business plan. Students who came to the class with a business idea pitched their idea to other students to convince them to join their group. All teams were assigned a coach after finalizing their topic for the business plan. The coaches, who are experienced business people, guided the teams through the business plan preparation and final preparation.
Many classes included guest lectures by a diverse group of business people, which was a great experience. The classes allowed students to hear from successful business people in the community and also offered a networking opportunity with the guest lecturers.
One of the guest lecturers was Christine Whitman, Chairman & CEO of Complemar Partners, a Rochester-based company. She described how she grew CVC, a privately held capital equipment manufacturer, to $100+ million revenue prior to an initial public offering (IPO) and subsequent acquisition, valued at $450 million, by the manufacturing company Veeco. Another interesting and useful guest lecture was given by Theresa B. Mazzullo, CEO of Excell Partners, Inc. Excell is a venture capitalist (VC) fund that “invests in Seed and Early Stage high-tech startups in New York State focused on Upstate NY”. She talked about how Excell evaluates startup companies and eventually decides who to fund and who to turn down. Her presentation was very helpful in gaining an understanding of how VCs operate and more importantly, it was very helpful in preparing the students for one of the most fun individual course assignments.
Most of the assignments were group assignments, especially those related to the business plan. However, four were individual assignments: two case studies, one Voice of the Customer and one due diligence evaluation of a new venture’s business plan. In the latter assignment, students had a chance to act as venture capitalists. A real-life entrepreneur – a former student of this class and current CEO of Arovia, Inc. – made a pitch to the class. He was seeking funding for his company’s product, the SPUD (Spontaneous Pop-Up Display), which is “the world's first collapsible HD monitor”. Students listened to the pitch, asked questions as a VC would, and did due diligence on the company, including studying the company’s financials and everything that is necessary to help make a sound investment decision. Following this exercise, students submitted a report on the viability of the company and their investment decision.
We also learned how to license a patented technology that is waiting to go to market. UR Ventures, the university’s technology transfer office, oversees more than 600 patents resulting from work done by UR researchers. According to UR Ventures website, the “innovations have significant commercial potential” and some of them “could fit nicely into a company’s existing intellectual property portfolio to enhance a product line or help launch a new one”. UR Ventures “markets these technologies to existing companies, or seeks an appropriate entrepreneur to create a company around the technology that will champion it and bring it to the marketplace”. To help with this mission, one of the assignments for the class was for each team to choose a UR Ventures technology and prepare a presentation on how to bring the technology to market. This was a very useful and eye-opening assignment for students. It has the potential of bringing a technology to market and of helping reduce the cost of maintaining patents.
End of the Course
Upon completion of the business plans, each team gave a 10-minute presentation of their work to the class and the instructors. My team’s business plan was for a company that could help angel investors with the due diligence process by predicting the probability of success of startup companies. Startup companies often have high failure rates. It has been reported that “80% of startups fail to see projected return of investment” and “40% liquidate and lose most or all investment”. Therefore being able to gauge the chances of success of a startup company before investing is very important.
Using data from Crunchbase, we built and validated a model that could predict a startup’s outcomes as follows: acquisition (80% of the time), closure (64% of the time) and IPO (58% of the time). Such predictions can be very helpful for an angel investor, which motivated our team’s value proposition of aiding “Angel Investors in investment selection to improve total return on investment (ROI)”.
Teams also had the option of joining the Mark Ain Business Model Competition and/or the New York State Student Business Plan Competition. Both competitions offer cash prizes to winners. Teams from this class have consistently performed very well in both competitions over the years.
Other noteworthy events during the course
Other highlights of the class included a lecture on Gradient Lens Corporation, a Rochester-based company founded by Professor Moore in 1980. The company markets several products including borescopes, which are optical instruments used for visual inspection of inaccessible areas, under the Hawkeye brand name.
In February, the students were invited to the opening ceremony of NextCorps’ new state-of-the-art facility in Sibley Square. The facility is “dedicated to fostering the creation and growth of high tech companies”. This event happened to be one of the last public functions of former U.S. Representative Louise Slaughter in the Rochester area. In addition, before the end of the course, Professor Riedlinger’s class on Small Business Innovation Research (SBIR), Small Business Technology Transfer (STTR) and other government support programs for small high tech businesses was held at the facility, allowing us to tour the space.
Effect of the course on my outlook
Taking this course had many benefits, including changing my outlook on why some businesses succeed and others fail. I learned how enormous an undertaking it is to start a business and get it off the ground. In fact, one of the exercises Dr. Moore undertakes at the beginning and end of the course is conducting an informal poll of who wants to start a business. According to him, over the years, fewer hands go up at the end of the course. He thinks that is actually not a bad thing because he feels students have increased their business literacy and are able to make a more informed decision about whether or not to start a business. Knowing from the onset what is involved is better that jumping in only to pull out after investing a lot of time and resources. After taking the course, I gained an appreciation of why so many hardworking UR scientist have not taken their patented ideas to market.
The course’s profound effect on me
Taking this course has had a profound effect on me. Sitting in the class and listening to the outstanding professors and guest lecturers changed the way I look at businesses and their strategies. For example, recently I walked into a business that requires membership to shop there. Since I was not a member, I was given temporary membership for three months. To my surprise, I was not asked to provide anything that could be used to track me during or after the temporary membership. I was expecting to be asked for my address, phone number and even a credit card number that could automatically be charged to issue me permanent membership if I did not opt out of the temporary membership. During the three month period, I was able to shop at the store and buy cheaper gas, and when the three months expired I did not go back to get permanent membership because I have membership elsewhere.
Before taking this class, I would not have noticed the problem in their customer retention strategy and would not have thought of what they could have done to keep me as a customer. If the company had signed me up automatically for permanent membership and charged my credit card, they would have made the switching cost a bit higher and increased the chances of retaining me. Without that, I walked away at no cost.
I highly recommend taking this course as a postdoc or graduate student. As a student in the course, you will get to know the high-tech business ecosystem in the Rochester area and could improve your business knowledge substantially. You will learn how to write a business plan for an idea you may have in your lab or elsewhere, and you will learn how to write SBIRs and STTRs, which are essentially grants for your business ideas. Such knowledge could help with getting more ideas from the lab to the market faster, benefiting not only the university but future customers. Being able to commercialize the wonderful research going on at UR is good for science and good for scientists. This concept aligns with the Finger Lakes Regional Economic Development Council’s objective to “Grow Jobs, Increase Regional Wealth, Drive Private Sector Investment, and Reduce Poverty”. Additionally, it is also very much in line with The University of Rochester’s START-UP NY plan to focus “on attracting eligible companies in the broad fields of science, engineering, social science, health science, business, and music”. I enjoyed the course and I am confident you will too.
Tracey Baas, PhD (URBEST Executive Director): For sponsoring the course.
Sally Thurston, PhD (Postdoc advisor): For permission to take the course.
Business Plan Team members: Scott Friedland (MD/PhD Candidate, UR), Tanner Cheek, MBA (Program Manager, Harris Corporation), Kiran Hu (TEAM Data Science Student, UR)
Coach: Dennis M. DeLeo, President and Director, Venture Jobs Foundation
Instructors: Professors Duncan Moore and Mike Riedlinger
Tracey Baas |
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